The
GoP and local producers of textiles and clothing must not fail in
attracting the US investment in the sector

By SHABBIR H. KAZMI
Dec 29 - Jan 04, 2003

Most of the US-based companies operating in Pakistan
plans to undertake expansion in their respective businesses. They seem
to be satisfied with the improving economic fundamentals. However, they
still have certain reservations mainly due to the negative perception
about Pakistan. The working environment is not as bad as being
portrayed.

Anjum Fasih, President of American Business Council
(ABC) disclosed this at a media briefing held recently. He shared the
findings of an annual informal business survey conducted by the ABC
among its members. Out of the total 54 members of the ABC, 41 responded.
This survey is conducted by the ABC among its members to assess their
perception about the investment climate in the Pakistan.

Sharing some of the details of the survey results,
Anjum said, "The feedback received from our members indicates
significant improvement in their perception about the conditions that
affect their businesses and future investment plans in Pakistan."
However, he urged the Government to focus on improving situation
regarding corporate and personal taxation; effective enforcement of laws
pertaining to Intellectual Property Rights (IPR), i.e. patents,
trademarks and copyrights; deregulation of industries, particularly
pharmaceutical pricing and oil marketing companies margins; combating
corruption and smuggling; tariff rationalization; improving corporate
governance; improving infrastructure and law and order situation; and
transparency in government decision making.

Fasih assured the full support of ABC member
companies to the Government and their willingness to work with it for
further improvement in the investment climate. Fresh investment and
creation of new job opportunities can lead to sustained growth of the
economy for the benefit of the people of Pakistan, particularly in
poverty alleviation.

The ABC functions as the Chamber of Commerce &
Industry of American companies operating in Pakistan. It has the
distinction of being the largest group of single country investors in
Pakistan. Most of the 54 ABC members belong to Fortune 500 companies.
Besides adherence to the highest quality standards, the US investment
has brought about transfer of sophisticated technology to Pakistan,
which is updated on an ongoing basis.

The ABC members employ 20,000 people directly. They
have the highest professional standards and continue to develop talent
in the country. It is interesting to note that in 2002 only 12
expatriates were employed in Pakistan whereas 134 Pakistanis were
working abroad with associates or sister companies and their
headquarters. Collectively they contribute a sizable amount to the
national exchequer as direct and indirect taxes every year. Last year,
they contributed over Rs 34.5 billion to the national exchequer, which
comes to about 9% of the total revenue collected by the Government.

American companies operating in Pakistan have
diversified interest. Out of this largest number belongs to healthcare (11)
followed by information technology (8),
chemical and fertilizer (5),
financial services (5),
food and beverage (5),
Energy, oil and gas (4),
engineering (2),
textiles (2)
and others (12).
Out of these 11 are listed at local stock exchanges.

Over the years, US companies have been making
substantial investment in Pakistan. The level of confidence of these
companies in the economy of country is evident from the fact that have
been ploughing back a large percentage of their annual profit in
Pakistan. Lately, energy sector has attracted the attention of US
investors and they have been making substantial investment in the
sector.

An area which has still not attracted the US
investors is textiles, particularly made-ups manufacturing. The US is
the largest buyer of textiles and clothing from Pakistan. A lot of
US-companies are interested in outsourcing their production to other
countries. The GoP and textile manufacturing companies should not ignore
the opportunity.